Saturday, November 29, 2008

Quote of the Day

"How many times does the end of the world as we know it need to arrive before we realise that it's not the end of the world as we know it?"

Michael Lewis, author of Liar's Poker

The end of the world is certainly chic this winter, what with Survivors on telly and both Blindness and Quarantine showing in UK cinemas right now. It strikes me that it is easier to imagine a near complete apocalypse than a more partial one, though the latter is a scenario that right now appeals to me creatively. What would it be like to exist where the disorder within civilisation is chronic and fluctuating rather than the more acute scenario imagined by the likes of The Happening. There's something of this in Cormac McCarthy's The Road, but the break with the past is still pretty definitive there.

On a separate note I listened to a podcast yesterday in which a number of leading economists reported back from the wild frontiers of their profession. Nothing I heard dissuaded me from the notion that this remains one of the shallower academic disciplines.

It seems to me that the basic problem economists face is the abiding one of complex non-linear systems. One way to deal with them, and this was the path of traditional economics, was to pretend that non-linear reality could somehow be reduced to predictable linear realities. So traditional economics simply assumed that underlying the way that we collectively value and consume stuff, there is a set of consistently selfish and rational individual decision processes.

Technological advances in the last two or three decades have permitted economists to venture out away from their restrictive models - indeed, the processing power available today allows all kinds of individuals in both the academic and commercial worlds to develop models have have at least the semblance of deciphering the behaviour of networks.

Economists have been shamelessly pilfering from parallel advances in other, perhaps deeper, disciplines such as psychology and neuroscience and the result has been a whole range of new ways forward such as Behavioural Economics and Network Economics. But these are still very early days and the results from all this complex number-crunching often remain unsatisfactory, even when compared to intelligent intuition. And 'people respond to incentives' is not a very profound insight on its own.

I did Economics to A-level at school. In spite of the views expressed above I still think some sort of basic (and compulsory) instruction in this field should be included in the syllabus from an earlier stage - though perhaps it would be best to style such a course as 'Risk'.

A citizenry with a better understanding of risk, with a sharpened perspective on long and short term goals would be one that is particularly well equipped to deal with this already rather challenging century. It would nicely set-up those with commercial inclinations of course, but would also have wider benefits across the student base.

One last puzzle gleaned from the podcast was this. At times like these, when we all have a sense of lost certainty and lost control, to what extent does heterodox thinking break more easily into the mainstream?

From what I have so far read of Naomi Klein's The Shock Doctrine gratuitous experimentation in times (and locations) of societal distress may not always be a good thing. But I certainly have a sense that 2008 is one of those historical moments when old myths are floundering and new ones are pushing to the forefront.

The US is certainly experiencing one of its periodic eras of political re-invention. It will be interesting to whether, as Simon Schama appears to believe, it has a store-room full of alternative, but equally American, ways of existing in the world.

I detect notes of both glee and trepidation behind the budding 'Post-American' publishing phenomenon. (e.g. Parag Khanna's The Second World: Empires and Influence in the New Global Order and Fareed Zakaria's The Post American World.) Many of us would like to see a more multilateral world - both politically and economically - and some might even take pleasure in seeing the bully get a bloody nose, but if America really is in decline, how can we ensure that the set of ideas that transformed 'the West' at the end of the eighteenth century continue to prevail within global civilisation?